Young, Restless–But Not Failed Yet

January 08, 2010

By Anthony Anderton

In the United Nations Development Programme’s 2009 survey of global living standards, Timor-Leste was ranked near the bottom–162nd out of 181 nations, below even Sudan. The US State Department, meanwhile, equates the nation’s indicators for health, literacy and income with those of Sub-Saharan Africa.

But the United States is not alone in its concerns. According to World Bank research in 2007, 50 percent of the Timorese population were living below the poverty line of 88 cents per day, while more than a third were living below the extreme poverty level of 71 cents per day. The Bank also reported some worrying findings on health, especially maternal and child health. For children under five, for example, incidences of wasting, stunting and being underweight actually increased between 2001 and 2007. Although participation and completion rates in education have improved, educating and training the rapidly growing population remains a serious challenge.

Fortunately, strong world oil prices have delivered a windfall for the region in recent years and these resources have the potential to keep funding Timor-Leste’s government and national development for decades to come. But the government is almost entirely dependent on resource earnings and international donors to fund the national budget, the increased spending from which has been the key driver of the economy.

Critics say this dependence on oil is a major weakness, noting the only other significant national export is coffee. Foreign direct investment is minimal, and the domestic private sector small, although sustained political stability and good economic management may create the conditions for expansion in both sectors.

But Texeira says sound economic management skills are something Gusmao’s government is sorely lacking, and he is critical of the way the budget has been used to deal with a number of potentially destabilising domestic issues such as financial compensation for war veterans, petitioners and the resettling of the more than 100,000 people displaced by the 2006 riots. Fretilin says the government is, in effect, buying peace, though its supporters argue that even if this accusation is true that it ultimately helps to underpin stability.

But despite massive efforts to improve public sector management and capacity, corruption and governance have been identified as emerging national problems. In 2009, Transparency International ranked Timor-Leste 146 out of 180 nations for levels of corruption, citing major concerns about public sector and official corruption. Gusmao himself, meanwhile, was recently embroiled in accusations of high level nepotism and corruption.

Kingsbury admits there’s corruption in Timor-Leste, but says he also believes the government is taking the issue seriously, including through the establishment of an anti-corruption commission, and argues that the evidence anyway ‘doesn’t support high level corruption.’

A Tale of Two Economies

Near the mountain hamlet of Maubisse, local coffee farmer Mr Batista leads me through a grove of head-high coffee trees. The waxy green leaves flick into our faces as we push past them, while underfoot, dried-up leaves inches deep crackle and snap as we walk. A canopy of giant acacia creates a cool, shaded world for the coffee trees below. Coffee is the enduring legacy of Portugal, which introduced the bean sometime in the mid-19th century. It flourished, and has been a mainstay ever since.

Yet last year was a bad one for growers. Batista grabs a handful of leaves and points upwards, shaking his head. In broken English he says that his trees badly need rain for a good harvest in 2010. In 2009, yields across the country were down by 50 percent, effectively halving the annual incomes of the nation’s cash-strapped farmers.

Batista’s village is surrounded by some of the most stunning landscapes in the region, but daily life for a Timorese farmer and his family is harsh.

Roads, where they even exist, are appalling. There are few if any services; most rural villages have no electricity, no running water and only limited access to the most basic medical care. More than 80 percent of Timor-Leste’s population depend on agriculture, and coffee is by far the most important cash crop. Other staples like cassava, maize and rice are grown, but Timorese farmers return some of the lowest yields in the region. Even in good years, they grow barely enough to satisfy household consumption and Timor-Leste is therefore heavily dependent on imports such as rice.